ASML: Connecticut plant on track for growth

With the White House peering over its shoulder, ASML said it expects sales of its hightech chip production system to rebound in the coming months, despite looming export controls that would ban the sale of its most advanced systems to China.

Based in the Netherlands, ASML builds systems used by semiconductor makers to imprint circuitry on chips, with its Wilton plant among Connecticut’s largest employers with more than 3,000 staff.

At the Biden administration’s urging last year, the Netherlands restricted sales of ASML’s most advanced machines to China, on concerns it could be used in the production of military hardware. And last month, Bloomberg reported that the Biden administration also issued a new request for ASML to curtail repair services on some of its delicate systems to customers in China — a significant new pressure point given the complexity of ASML’s systems.

It’s unclear if the prohibition has affected the company’s bottom line.

On Wednesday, ASML reported sales of $5.4 billion in the first quarter, selling 66 new systems in that time period — 47 fewer than the number sold in the prior quarter. First-quarter sales were also off 22 percent from a year ago, and profits down more than a third to $1.3 billion.

Still, company executives were optimistic on Wednesday, with one pointing to $13 billion in new orders over the preceding six months, which they said is “quite significant.” ASML stated it expects revenue to rebound to mirror its 2023 total of roughly $30 billion.

“If you look at the announced plans of some of our larger customers, it’s pretty clear that in the next couple of quarters significant orders need to come in,” Roger Dassen, chief financial officer, said Wednesday on a conference call. “If we look at 2025, we are looking at a significant up-tick.”

Investors were not initially sold on those words, however, with ASML securities dropping 17 percent Tuesday evening and Wednesday morning, though still trading 30 percent above the stock’s price at the start of the year.

As for the loss of sales to China, the Biden administration says it’s a matter of national security.

“It’s not just about the United States — other countries share our concerns about certain export licenses of certain technology,” said John Kirby, National Security Council spokesman in response to a question on ASML sales to China during a January press briefing at the White House. “Our decisions in terms of these export licenses is really designed specifically to make sure that we can continue to protect U.S. national security. That’s what we’re focused on.”

Under the CHIPS and Science Act of 2022, the federal government is flooding billions of dollars into the semiconductor industry to support the construction of new factories in the United States. Taiwan Semiconductor Manufacturing Co. is among those planning to build U.S. plants, with TSMC the world’s largest maker of chips for consumer products.

This week, the White House announced plans by Samsung to build a new $40 billion plant in Texas that would support about 21,500 jobs. And last month, President Biden visited a factory under construction in Arizona by Intel, which is in a race with Nvidia and other companies to produce chips to enable the massive computing power required by emerging artificial intelligence systems.

ASML was already in growth mode when the CHIPS Act went into effect, as more and more devices are enabled with computer chips and sales accelerate for the newest vehicles and emerging electric meters for homes. After adding a parking garage and other upgrades to its Wilton factory on Danbury Road, ASML now envisions a new, five-story tower there.

Before the curb on trade with China, the company in 2022 had expressed the goal of having 3,500 people working in Wilton by this September. At last report, it had 3,100 people in Wilton out of roughly 42,400 workers company wide. About half of that number are in the Netherlands.

“Little Wilton has one of the world’s top companies now — and not only are they are largest employer, they are our largest tax base,” said Toni Boucher, first selectman. “It behooves us to make sure that they are well supported. I think they know that.”